Carrying value-earnings for available-for-sale

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Reference no: EM1344521

Presented below are 3 unrelated situations involving equity securities:

Situation 1:

An equity security, whose market value is currently less than cost, is classified as available-for-sale but is to be reclassified as trading.

Situation 2:

A noncurrent portfolio with an aggregate market value in excess of cost included one particular security whose market value has declined to be less than one-half of the original cost. The decline in value is considered to be other than temporary.

Situation 3:

The portfolio of trading securities has a cost in excess of fair value of $13,500. The available-for-sale portfolio has a fair value in excess of cost of $28,600.

Instructions:

What is the effect upon carrying value and earnings for each of the situations above?

Reference no: EM1344521

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